Cree shares fall in after-hours trading

Shares of LED lighting company Cree fell as much as 9 percent in after-hours trading Tuesday after the company issued disappointing guidance for its fiscal first quarter.

Cree also released mixed results for its fiscal fourth quarter and said it will be launching its next-generation light bulb in Home Depot stores in late September.

CEO Chuck Swoboda said during a conference call that the new bulb will offer “better light at a better value.”

“What does that mean?” he continued. “It means we think we can come up with a bulb that even has better features than our customers had in the past, and frankly lower the price point, while still being the premium bulb in the market.”

The Durham company announced after the markets closed that it anticipates revenue for the fiscal first quarter will range from $356 million to $378 million, falling short of the $390.4 million that analysts polled by Bloomberg News have been projecting. Similarly, the company forecast that its adjusted net income will range from 10 cents to 16 cents per share, while analysts surveyed by Thomson Reuters had penciled in 22 cents per share.

Revenue for the quarter totaled $388 million, up 2 percent and a significant upgrade from a 10 percent decline in the prior quarter. It was also $2.9 million more than analysts projected.

“Commercial lighting regained momentum in the quarter,” offsetting a slowdown in consumer lighting sales, Swoboda said during a conference call.

Sales in the previous quarter suffered from several factors, including customer service disruptions stemming from conversion to a new software system. Swoboda said Cree is still working to rebuild its pipeline of new projects that drive sales.

Adjusted net income, meanwhile, totaled $19 million, or 19 cents per share, versus a net loss of $21 million a year ago. But analysts expected adjusted net income to be a penny per share higher.

Cree employs more than 2,500 workers in Durham.

The company makes LED light bulbs and indoor and outdoor LED light fixtures, as well as components that other manufacturers use in LED lights. Its LEDs also are used to illuminate mobile phones, TVs, electronic signs and car dashboards.

Cree had been planning to spin off its power and radio frequency subsidiary Wolfspeed into a separate publicly traded company, but last month it switched gears and instead agreed to sell the business for $850 million in cash to European semiconductor maker Infineon Technologies. All of Wolfspeed’s 550 employees are being offered jobs by Infineon.

Swoboda said the sale, which is expected to close by the end of the year, “speeds our transition to an LED lighting technology company while providing significant resources to accelerate our growth.”